View Full Version : The bear market is almost over

09-09-2001, 12:15 AM
I'm excited to almost be a bull again. I am guessing within the next 30-45 days I will go long again. Thoughts?

09-09-2001, 02:01 AM

This is a link to Gary Smith's post in regards of the bottom.

Agree or disagree I am quoting a decent timer with hell of a


09-11-2001, 02:43 AM
Indeed what Gary Smith says may be relevent but to point out a couple of things, many indices have traded sideways this year and some have fallen only recently but not by the 20% which is often used as the metric for a bear market. This is the case with the DOW. So to say that the DJIA has been in a bear market would be wrong I think. It may be starting one but it hasn't been in one in my mind. Most of the "bear" market talk is in regards to the NASDAQ 100 and other NASDAQ technology stocks. One could argue that the S&P 500 is in a bear market. But this is a cap weighted index that has a large component of NASDAQ technology companies so I think it's fair to say that the decline in these technology companies is by far the biggest contributor to the decline of the S&P 500. With that in mind:

>>Amazingly, there was a slight increase in bulls in last week's Investors Intelligence survey. The record stretch (closing in on three years) of more bulls to bears continues unabated. This was the one sentiment indicator (when it got below 26% bears for several weeks at the beginning of July that best foretold the carnage of the past few months. >All bear markets in the past have concluded with weeks and months of more bears than bulls among Investors Intelligence bears. So beware of getting prematurely bullish when this inversion first occurs. >Another sentiment winner recently and one I haven't seen mentioned was the unprecedented out of this world three week cumulative net selling by the NYSE members - including floor traders and specialists (haven't seen this week's numbers yet) >Based on a slew of sentiment indicators, if this bear ends like all in the past, we have a long ways to go in both price and time before the *ultimate* bottom. > Newsletter writer sentiment, mutual fund cash positions, net selling by mutual fund holders, insider buying, and NYSE members activity, among others aren't remotely close to levels associated with past bottoms. > Newer sentiment indicators not around before 1982 such as the stock futures Commitments Report (which keeps getting worse and worse) the near record high equity allocations among Wall Street strategists as compiled by Richard Bernstein at Merrill, and the Rydex timer ratios (which still is a ways off from 97 and 98 capitulation levels) also paint a picture of a market where the only fear is the fear of missing the next tradable rally instead of the fear there will be no bottom - the later being an important ingredient of the final bottom.<<

My point is that Gary Smith is wrongly applying these indicators. For instance to say that the DJIA has been in a bear market this year is wrong. To say that the Dow Jones Transports have been in a bear market is wrong. To say that the Dow Jones Utilities have been in a bear market is wrong. And to repeat myself again, there are several other indices that do not have a significant tech weighting that have traded sideways to slightly down. We may be seeing the beginning of a prolonged downturn in prices for the broad market of stocks that are not related to technology but to say they have been in one I think is wrong.

09-13-2001, 04:50 PM
Patience is a virtue.